PRESS: Russia’s Krasnoe & Beloe alcohol retail chain plans IPO

MOSCOW, Jul 19 (PRIME) -- Russian retail chain of alcohol stores Krasnoe & Beloe (Red & White) plans to float its shares at an initial public offering (IPO) on an exchange, Kommersant business daily reported on Monday quoting sources.

A source on the food retail market told Kommersant that Mercury Retail Group had hired E&Y to do due diligence of the 8,800 stores of the chain. An investment source also told the business daily that the company planned an IPO to float 15–20% with a possible secondary public offering (SPO) that may drive free-float to 25–30%.

Andrei Vasin, former head of the corporate finance and investor relations department of retailer X5 Retail Group, entered a similar position in Krasnoe & Beloe, which is an indirect sign that the company was preparing for the IPO, Kommersant reported.

A source said that Mercury Retail Group expected the Krasnoe & Beloe business to be valued at 50% of retail revenue. Under these conservative expectations, the company may be valued at 245 billion rubles, since the Infoline agency puts the revenue to 490 billion rubles in 2020.

Infoline CEO Mikhail Burmistrov said that investors changed their attitude to the retail market after successful IPOs of online retailer Ozon and discounter Fix Price. Taking the interest into account, Krasnoe & Beloe may float shares until the end of 2021, he said.

E&Y declined to comment, Krasnoe & Beloe did not confirm the information, Vasin could not be reached for comment. A representative of X5 Retail Group confirmed that Vasin left the company.

Krasnoe & Beloe was founded by Sergei Studennikov in 2006. In 2019, Studennikov and businessmen Igor Kesayev and Sergei Katsiyev, beneficiary owners of the retail chain Dixy and of the Bristol chain of alcohol stores, merged their assets into Mercury Retail Group, in which Kesayev and Katsiyev own 51% and Sudennikov owns 49%. Mercury Retail Group is currently selling the Dixy chain to retailer Magnit for around 92.4 billion rubles.

(74.1656 rubles – U.S. $1)

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